After watching the film, I definitely agree that the notion of firms being “too big to fail” still exists today, and in more industries than just investment banking. The 2008 financial crisis showed that investment banks are interconnected and rely on each other’s financial wellbeing. In the film, this interconnectedness could be seen after the Lehman Brothers’ bankruptcy filing. Investment banks saw immediate hits to their businesses as a result of the dwindling confidence in the industry. Other firms, such as GE, saw that their operations were affected by the lessening access to capital from investment banks. To the dismay of many, the notion of “too big to fail” means that the government may be required to aid the financial system at large when the market is unstable. Continue reading
I believe the notion of “Too big to fail” still exists today. As we have learned from the recession and the fall of Lehman Brothers, the few major banks have a colossal affect on the economy. Due to the massive amount of power these banks possess, it is imperative to keep the financial system sound and resilient, even if this means government intervention. The influence these banks have is very far stretching, reaching areas beyond Wall St. For example in the video it reveals due to the Lehman Brother’s struggle, there were catastrophic consequences in European banks and even GE was having trouble funding their day-to-day operations.
October 1, 2013
To start I have to admit I didn’t think there was such a thing as the government shutting down, so much for the “too big to fail”. Yes, this isn’t a failure it is just due to the government parties’ inability to meet each other half way and make up their minds. This isn’t like the common situation in many households of what to eat tonight for dinner. The typical back and forth, can’t come to agreement and each family member just decided to do their own thing. No this is real life, real people losing money as they wait for the congress to make a decision on funding. Not to mention these people who also work for government and are the reason why some people in America for the past 3 days haven’t been getting paid, ARE getting paid. Well that seems weird doesn’t it? The government is not grasping that there are people waiting to go back to work, to bring home money to feed their families. Similar to Lehman Brothers and Enron, not thinking of the ‘smaller’ people who will be affected. Continue reading
The scene that intrigued me the most, was when Henry Paulsen invited all the CEO’s of the big banks to come together and meet at a round table to try and save Lehman Brothers. That room was full of people who together controlled a ridiculous sum of money. Yet, all I kept thinking about was how they are just human beings weighing their options and trying to make decisions that are either best for their companies, themselves or both. The CEO’s in the room included: John Mack (Morgan Stanley), John Thain (Merrill Lynch), Jamie Dimon (JP Morgan), Lloyd Blankfein (Goldman Sachs), and Vikram Pandit (Citigroup).
I will now try to write a dialogue as if I was at this round table discussion, and had the undivided attention of these CEO’s.
Movie Time 7:18 – 8:24